During Year 4. Racing Limited reported net income after taxes of $951,000. During the year, the number of shares…

During Year 4. Racing Limited reported net income after taxes of $951,000. During the year, the number of shares…

Question:

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During Year 4. Racing Limited reported net income after taxes of $951,000. During the year, the number of shares of stock outstanding
remained constant at 5,020 shares of $50 par, 6 percent preferred stock and 40,200 shares of common stock. The company’s total
liabilities and stockholders’ equity on December 31, Year 4, was $1,405,000, which included $452,000 of liabilities. The common stock
was selling for $60 per share at the end of the year All dividends for the year was declared and paid, including $2.05 per share to
common stockholders.
Required:
Compute the following
a Earnings per share
b. Book value per share.
c. Price-earnings ratio
d. Dividend yield
Note: Do not round intermediate calculations. Round earnings per share and book value per share to 2 decimal places. Round
price-earnings ratio and dividend yield percentage to 1 decimal place.
a Earnings per share
b Book value per share of common stock
e Price-eamings ratio
d Dividend yield
times
%

Expert Answer:

Answer rating: 100% (QA)

Let s calculate each of the requested values step by step a Earnings per share EPS EPS is calculated
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